China's CPI and PPI dip amid high base effect in February
Consumers selecting vegetables at a supermarket in southwest China's Guizhou Province, February 9, 2025. /VCG
China's consumer price index (CPI), a main gauge of inflation, edged down 0.7 percent year-on-year in February, while the producer price index (PPI) fell 2.2 percent, data from the National Bureau of Statistics (NBS) showed on Sunday.
NBS statistician Dong Lijuan attributed the decline in prices to the staggered shift of the Spring Festival and the resulting high base effect, more favorable weather in February, price-off promotions and fluctuations in some international commodity prices.
The Spring Festival holiday occurring during Jan-Feb this year led to a higher comparison base from last year's elevated food and service prices as the 2024 holiday fell solely in February. The absence of such a surge this year resulted in a negative impact on the year-on-year CPI comparison, while when deducted for the staggered shift of the Spring Festival, the CPI actually saw a modest increase of 0.1 percent, indicating the current trend of moderate price recovery has not changed, Dong added.
Favorable weather conditions in February also contributed to the CPI dynamics. This year's mild weather facilitated the growth and transport of fresh vegetables, helping to stabilize food prices.
In the automotive sector, price-off promotions for both fuel and new energy vehicles further influenced the CPI. Prices for these vehicles dropped by 5.0 percent and 6.0 percent, respectively, contributing to a 0.16 percentage point decrease in the CPI.
A technician works on a machine tool production line in east China's Anhui Province, March 7, 2025. /VCG
On the industrial front, the PPI saw a 0.1 percent month-on-month and a 2.2 percent year-on-year decline. The PPI's decline was influenced by the seasonal lull in production activity around the Spring Festival, reduced demand for building materials due to halted construction projects, and stable coal supply ensuring ample reserves at power plants and ports. Additionally, the transmission of international oil price fluctuations led to a decrease in prices within domestic petroleum-related industries.
The NBS economist noted that the gradual impact of macroeconomic policies and rising production demand in certain sectors also helped narrow the PPI's decline.